New Product Process

Welcome back to Marketing2015

Although recent blog themes have been have been focused around some area of athletics or athletes, it seems time to get into some of the more technical concepts of marketing. Class discussion and readings in the time passed since the last blog post have included topics such as product positioning, target markets, market segmentation, and other topics of market research and product placement. The purpose of this post will be to detail a process discussed in chapter 10, the New Product Process.

As expected, the New Product Process has multiple steps, seven to be exact, that must be taken in successive order to give a new product the best possible chance at being successful once brought to market. Taking these steps will greatly increase a product’s chances, however following them will not and cannot ensure than any product will ultimately meet the goals intended by the producer bringing it to market. This process is specifically geared toward the marketing of a new product, but applies as well to marketing a new service, with only a few conceptual differences. Although some of these 7 steps can be undertaken simultaneously, none can be skipped altogether, and any serious rearrangement will have effects on the effectiveness.

Without further ado, the steps:

1.     New-Product Strategy Development

This is the area where a team will define the role that needs fulfillment within a company’s portfolio. Firms will use SWOT analysis and environmental scanning to see where they can impact a market and how.

2.     Idea Generation

In this stage, a large number of concepts are developed based on perceived opportunities discovered in step 1. This process is undertaken by members of the new-product team of the firm, as well as by collecting input from customers, suppliers, outsourced R&D teams, and other similar products that can spark ideas.

3.     Screening and Evaluation

This is when a slightly narrowed group of ideas is evaluated to determine the actual plausibility of the product and the list is narrowed further to include just a few of the best ideas. Internally, production capabilities are assessed, and externally the idea of the product is preliminarily tested without an actual product being built.

4.     Business Analysis

At this point a product has shown high potential and is only one step from having a prototype built. Analysis done now will specify the product features, as well as the marketing strategy that will be employed. There are also many financial projections undertaken to show how the new product is likely to affect the bottom line.

5.     Development

Finally, all the conceptual work is done and the prototype of the product is produced. Getting to this point involves so many prior steps because this is where a significant capital outlay must occur. Having a tangible model allows for further testing of production efficiency as well as lab and consumer testing to see that the product meets the protocol that has previously been established.

6.     Market Testing

Now that there are actual units being produced, it’s time to test and see if people will buy the product when faced with the choice of it versus its competitors in realistic buying scenarios. The product can be tested in a standard, controlled, or simulated test markets depending on how much money can be spent, how long the firm has to test the product, and what type of product it is being tested.

7.     Commercialization

This final step is when the product is positioned in the minds of consumers and the process of getting it to actual retail locations is undertaken. Many products are slowly “rolled-out” regionally to mitigate the risk of the product tanking, and to add a stream of revenue as quickly as possible to begin to offset all the costs undertaken to get to this point.

           

The use of these sevens steps is typically a very lengthy and expensive process that can be immeasurable helpful if employed in the correct ways. Sometimes, going through all this means that your product is delayed months or years before getting to consumers, but taking the time is worth it to know the firm’s money isn’t wasted on a tanking product.